Facebook put out their 2015 earnings last week. The consensus: things are going well. Following last week’s earning call, I wanted to dive into what we learned from FB in 2015, and just how big their opportunity is moving forward.

In Q4, FB put up $4.5B of mobile revenue, 80% of their total number. They earned ~$12B in mobile revenue on the year. Pretty incredible for a company that used to make their money from platform payments (Zynga!) at a time when we were all complaining about the Facebook mobile app, no less. Now Facebook’s mobile revenue is a register on the US ad spend map; it’s something we can put on the same scale as Google, print, and television.

If 2015 was the year Facebook proved to brands that they should be directing their ad spend to mobile, how much money can we expect to go Facebook’s way in 2016? And from which of the traditional and web media channels will this money come from? The key here is Facebook’s strength in brand advertising, and their ability to pair it with the direct response marketing normally associated with digital.

The size of the brand advertising opportunity

For a long time, almost all advertising used to be brand awareness advertising. Used in mediums like TV, print, and radio, brand advertising told consumers about products, building memory structures to drive purchases the next time a consumer found themselves in the deodorant aisle.

Brand advertising spend is a big number. In 2015, US companies spent ~$130B on brand awareness advertising through traditional channels (TV, print, radio). That’s double the amount spent across all of digital, a big pile of money that’s stayed put primarily due to the lack of any solid brand advertising web channels. A Google ad is great when customers are actively seeking out my products, but how do I reach the people that don’t know they want my product?

We can see brand advertisers’ tentative adoption of digital marketing in the way ad spend has moved in the last five years. When ad spend left traditional channels in the first digital wave (the pre-mobile web channels of search and display), advertisers diverted money away from print and radio. But TV, the last bastion of passive brand advertising, was left untouched.

By the end of 14, we saw web display giants like Google prove to advertisers that direct response web advertising was worth the money they would otherwise be spending on print. Of course, by then a new channel was eating up the time spent by consumers. Mobile.

The Mobile Opportunity

In 2014, consumers spent 24% of their time in media on mobile. Meanwhile, brands directed only 8% of total spend to those channels. Advertisers have some catching up to do. As we can see in the visual below, that represents a huge opportunity.

But is 24% of people’s time spent in media the ceiling of mobile? Probably not. We already know that less and less of college grads are spending money on TV bundles. How much of people’s time can mobile take from traditional channels like TV?

A recent survey by Ericcson looked at the share of time different age groups split between their devices. The big takeaway: the 16 - 19 age group spends twice as much time on smartphones as they do on TV.

Based on the data, I’ll make a conservative estimate that mobile will match TV in time spent within the next five years, with each sitting at around 30% of the total time we spend looking at screens.

So let’s take all this and apply it to the ad spend numbers in 2015. If we assume that mobile and TV meet in the middle, we’d see the total mobile ad spend market jump from ~$13.5B in 2014 to $55B+ in this future market.

Facebook and Competition in Mobile

How much of mobile ad spend has Facebook been winning historically? They took around 54% of the ~$13.5B mobile market in 2014. If they keep their 54% share moving forward, they’d take $30B+ in today’s ad spend market. But do we think Facebook can maintain this dominance in mobile?

Let’s break it down: as a brand advertiser today, what are my current options when my boss comes to me with a check to put towards mobile?

Twitter is an option, but it has lower reach, something that’s of tantamount importance to me as a brand advertiser.

I can go to Google, but how many people are really using their mobile browser to search for things? Even then, I’m putting money into direct response and not brand awareness.

Snapchat is a good option, but it lacks any of the targeting that I receive through Facebook.

I could advertise on mobile games with interstitials, but that is a crummy user experience -- interstitials are always a nuisance to the customer.

Facebook or Instagram. Two dominant social platforms with tons of daily active users seeing ads within their feed that look like user-generated content. (And the videos start playing automatically.)I can’t think of a better mobile advertising experience available to today’s brand advertiser.

Facebook has a lot of things going their way. Consumers are flocking to mobile and spending less and less time on traditional and web channels. Facebook currently offers the best advertising experience available on mobile, and their challengers have either been acquired by FB, or don’t have the reach (Twitter) or targeting (Snapchat) to pose a serious threat. All Facebook’s advantages in this channel are magnified when you look outside of the US, where many markets leapfrogged the web and went straight to mobile. This means a huge opportunity for Facebook abroad, though in APAC they’ll face a competitor for mobile ad spend that they haven’t seen in the US: the messaging behemoths. And what of the markets outside of APAC? From the image below, it would seem Facebook is doing okay there, too.